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InnovaDerma says direct-to-consumer tweaks are working as it gears up for landmark Boots launch

The company has altered its social media strategy, which has started to bear fruit
woman by the sea in bikini
The company is launching its already successful Skinny Tan product in Boots

InnovaDerma PLC (LON:IDP) said revisions to its direct-to-consumer strategy have begun to bear fruit in recent weeks.

The group, which sells beauty and personal care products such as the globally successful Skinny Tan line, has faced headwinds on Facebook, which has begun prioritising personal engagement over businesses and brands.

READ: InnovaDerma chairman says company at a "strategic inflection point"

This proved a dampener on sales in the six months to December 31, which receded £200,000 year on year to £3.9mln.

“We have now revised our engagement strategy on Facebook and diversified onto other platforms such as Instagram and Google,” InnovaDerma told investors.

These actions have begun to gain traction, receiving positive customer responses and generating good revenue growth in recent weeks.”

The company said the second half had begun “strongly” with these tweaks to its direct-to-consumer strategy bearing fruit.

It is also gearing up for the launch of Skinny Tan in 1,305 Boots stores, with opening orders expected in a matter of weeks ahead of the official launch from mid-February/early March.

The chemist chain is one of the UK's largest retailer of beauty and personal care products.

Broker making no change to full-year forecast

Broker finnCap pointed out that while the eye was drawn to the DTC hiatus, its retail channel had performed creditably, growing 36% in the six months.

Analyst Mark Brewer noted that InnovaDerma had left its full-year revenue forecast intact. This, he said, implied second-half revenues would be in the order of £10.5mln, up £4mln on the comparable period last year.

“Whilst appearing challenging, it is driven by a threefold increase in the number of UK retail stores ranging its flagship products (Skinny Tan and Roots),” he explained.

Brewer is, therefore, making no change to his own forecast and is sticking with his 220p a share price target.

At 11.20am, the stock was changing hands for 81p, down 14%.

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InnovaDerma PLC Timeline

CN Research
February 25 2019

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